Creating Community Economics with Local
Currency

by Paul Glover

Here
in Ithaca, New York, we've begun to gain control of the social and environmental
effects of commerce by issuing over $110,000 of our own local paper money, to
thousands of residents, since 1991. Tens of thousands of purchases and many
new friendships have been made with this cash, and millions of dollars value
of local trading has been added to the Grassroots National Product.

We printed our own money because we watched Federal dollars come to town, shake
a few hands, then leave to buy rainforest lumber and fight wars. Ithaca's HOURS,
by contrast, stay in our region to help us hire each other. While dollars make
us increasingly dependent on transnational corporations and bankers, HOURS reinforce
community trading and expand commerce which is more accountable to our concerns
for ecology and social justice.

Here's how it works: the Ithaca HOUR is Ithaca's $10.00 bill, because ten dollars
per hour is the average of wages/salaries in Tompkins County. These HOUR notes,
in five denominations, buy plumbing, carpentry, electrical work, roofing, nursing,
chiropractic, child care, car and bike repair, food, eyeglasses, firewood, gifts,
and thousands of other goods and services. Our credit union accepts them for
mortgage and loan fees. People pay rent with HOURS. The best restaurants in
town take them, as do movie theaters, bowling alleys, two large locally-owned
grocery stores, our local hospital, many garage sales, 55 farmer's market vendors,
the Chamber of Commerce, and 300 other businesses. Hundreds more have earned
and spent HOURS who are not in the HOUR Town directory.

Ithaca's new HOURly minimum wage lifts the lowest paid up without knocking
down higher wages. For example, several of Ithaca's organic farmers are paying
the highest commmon farm labor wages in the world: $10.00 of spending power
per HOUR. These farmers benefit by the HOUR's loyalty to local agriculture.
On the other hand, dentists, massage therapists and lawyers charging more than
the $10.00 average per hour are permitted to collect several HOURS hourly.

But we hear increasingly of professional services provided for our equitable
wage.

Everyone who agrees to accept HOURS is paid two HOURS
($20.00) for being listed in the HOUR Town directory. Every year they
may apply to be paid two additional HOURS, as reward for continuing participation.
This is how we gradually and carefully increase the per capita supply of our
money. Once issued, anyone may earn and spend HOURS, whether signed up or not,
and hundreds have done so.

HOUR Town's thousand listings are a portrait of our
community's capability, bringing into the marketplace time and skills not employed
by the conventional market. Residents are proud of income gained by doing work
they enjoy. We encounter each other as fellow Ithacans, rather than as winners
and losers scrambling for dollars.

The Success Stories of 300 participants published so far testify to the acts
of generosity and community that our system prompts. We're making a community
while making a living. As we do so, we relieve the social desperation which
has led to compulsive shopping and wasted resources.

At the same time Ithaca's locally-owned stores, which keep more wealth local,
make sales and get spending power they otherwise would not have. And over $10,000
of local currency has been donated to over 100 community organizations so far, by
the elected HOUR board of directors.

As we discover new ways to provide for each other, we replace dependence on
imports. Yet our greater self-reliance, rather than isolating Ithaca, gives
us more potential to reach outward with ecological export industry. We can capitalize
new businesses with loans of our own cash. HOUR loans are made without interest
charges.

We regard Ithaca's HOURS as real money, backed by real people, real time,
real skills and tools. Dollars, by contrast, are funny money, backed no longer
by gold or silver but by less than nothing- $8.4 trillion of national debt.

Ithaca's money honors local features we respect, like native flowers, powerful
waterfalls, crafts, farms and our children. Our commemorative HOUR is the first
paper money in the U.S. to honor an African-American.

Multi-colored HOURS, some printed on locally-made watermarked cattail (marsh
reed) paper, or handmade hemp paper, some with non-xeroxable thermal ink, all
with serial numbers, are harder to counterfeit than dollars.

Local currency is a lot of fun, and it's !egal. HOURS are taxable income when
traded for professional goods or services.

Local currency is also lots of work and responsibility. To give other communities
a boost, the book Hometown Money is available.

It explains step-by-step start-up. and maintenance of an HOURS system,
and includes forms, laws, articles, procedures, insights, samples of Ithaca's
HOURS, and issues of Ithaca Money. It's been sent to over 1,000 communities
in 49 states and beyond, and our example has become international.

Ithaca HOUR Factsheet

Since
1991, we've issued over $110,000 of Ithaca HOURS (6,500 HOURS at $10.00 per HOUR).
Six denominations: 2 HRS, 1 HR, 1/2 HR, 1/4 HR, 1/8 HR, 1/10 HR. Includes a commemorative
HOUR, the first paper money in the U.S. to honor an African-American.

Thousands of people, including 500 businesses, have earned and spent HOURS.

They have made millions of dollars value of trades with HOURS, representing
hundreds of job-equivalents at $20,000 each.

HOURS are thus real money-- local tender rather than legal tender, backed by
real people, real labor, skills and tools.

Most HOURS have been issued as payments to those who agree to be published
backers of HOURS, listed in our bimonthly directory HOUR Town. Every year
they may send the coupon again to receive a bonus payment-- which gradually
and carefully increases the HOUR supply.

11% of HOURS are issued as grants to community organizations. Over 100 nonprofits
have received grants totalling over 1,500 HOURS ($15,000) since we began.

5% of HOURS may be issued to the system itself, primarily for paying for printing
HOURS.

Loans of HOURS are made with NO INTEREST CHARGED. These range $50- $30,000 value.

HOURS are legal. Professor Lewis Solomon of George Washington University has
written a book titled "Rethinking Our Centralized Monetary System: the
Case for a System of Local Currencies" (Praeger, 1996) which is an extensive
case law study of the legality of local currency. IRS and FED officials have
been contacted by media, and repeatedly have said there is no prohibition of
local currency, as long as it does not look like dollars, as long as denominations
are at least $1.00 value, and if it is regarded as taxable income.

HOURS are protected against counterfeit. They are multicolored, with serial
numbers. The 1995 Quarter HOUR and 1997 Eighth HOUR use thermal ink, invented
in Ithaca, which disappears briefly when touched or photocopied. The 1993 Two
HOUR note is printed on locally-made watermarked 100% cattail paper, with matching
serial numbers front and back. The 1996 Half HOUR is 100% handmade hemp paper.
Our District Attorney has declared HOURS a financial instrument, protected by
law from counterfeit.

Benefits

HOURS expand the local money supply

HOURS promote and expand local shopping, with an endless multiplier

HOURS double the local minimum wage to $10.00, benefitting not only workers
but businesses as well, who find new and loyal customers.

Our English language video (17 minutes) is available for $17.00, or $15.00
with the book ($40.00 for book and video). Spanish language video (10 minutes)
is available with book for $12.00. paul5glover@yahoo.com